Eric Cantor pulled out of the debt ceiling talks this morning, citing unbridgeable differences over the Dem insistence on tax hikes as part of a deal, and in his statement, he called on President Obama to step in and resolve the tax issue:
Since early May, Vice President Biden has led meetings surrounding the debt limit. The Vice President deserves a great deal of credit for his leadership in bringing us this far. We have worked to find areas of commonality to meet the goal of identifying spending cuts commensurate with or exceeding the amount of the Obama Administration’s request for a debt limit increase. I believe that we have identified trillions in spending cuts, and to date, we have established a blueprint that could institute the fiscal reforms needed to start getting our fiscal house in order.
That said, each side came into these talks with certain orders, and as it stands the Democrats continue to insist that any deal must include tax increases. There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation. Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue. Given this impasse, I will not be participating in today’s meeting and I believe it is time for the President to speak clearly and resolve the tax issue. Once resolved, we have a blueprint to move forward to trillions of spending cuts and binding mechanisms to change the way things are done around here.
What’s interesting here is that by all appearances the main emerging obstacle to compromise was the demand by Senate Dems that a final deal include some kind of economic stimulus measures, such as infrastructure spending or a payroll tax cut. Republicans spent all day yesterday hammering the Dem demand, arguing that more stimulus was at odds with the Biden-led group’s goal of reducing spending.
Yet according to Cantor, the main sticking point is over the Dem push for tax hikes. There’s no mention in his statement of the Dem demand for new jobs-creation measures.
Cantor’s move seems designed to pressure Obama into making a choice between publicly backing the Dem demand for tax hikes or taking them out of the equation — perhaps an effort to transfer ownership of the whole mess to the President if the talks fail.
More when I learn it.
UPDATE: Reid spokesman Jon Summers responds: “Debt talks are too serious for people to take their marbles and go home. The American public expects more than this.”
UPDATE II: It’s important to note that Cantor is only citing tax “hikes,” as opposed to increased revenues, as the major sticking point. Dems think Cantor’s pull-out is a tacit admission that increased revenues will have to be part of any final deal, and that Cantor wants John Boehner to be the one to cut a deal with increased revenues.